Matthew Sinclair, chief executive of the charity, said: "The people funding the benefits system through their taxes should never find themselves subsidising a lifestyle for others which they cannot afford for their own families."

"Ministers are right to be simplifying the benefits system and removing the perverse incentives that have condemned people to a life on hand-outs."

Advertisement

British Children will "pay the price" for the Government's new benefits cap with parents having less to spend on food, clothes and rent, according to a children's charity.

Matthew Reed, chief executive of the Children's Society, said it was not right for the government to try and make work pay by "putting children on the breadline":

140,000 children, compared to 60,000 adults, will pay the price as parents have less to spend on food, clothing and rent.

Families, especially in London where the cap is being launched, will have their lives disrupted as they are forced to find cheaper rents in other parts of the country, resulting in children having to leave behind their schools, friends and breaking vital support networks.

– Matthew Reed, chief executive of the Children's Society,

The charity called on the government to do more to tackle sky high rents in some areas of the UK as well to make childcare affordable.

Work and Pensions Secretary Iain Duncan Smith has defended the new benefits cap of £500 a week, arguing that it is necessary to change a culture of large families staying out of work.

"This is both about saving money and, more particularly, about changing a culture that had left families, particularly large families, finding it easy and a reality for their lives to stay out of work on taxpayers' benefits," he told BBC Breakfast.

The MP said a "very, very significant number" of people had gone out to work in households within the four London boroughs where the cap has been trialed.

Smith added: "The key principle behind this all over the country is that those who work, those who are trying to do the best in their households, do not see others who are down the road, who are on benefits, on welfare, actually getting more than they do."

The cap will see couples and singe parents receive a maximum of £500 while single people will only receive £350. Credit: Dominic Lipinski/PA Wire

A limit on the total amount of benefits that people aged 16 to 64 can receive has begun rolling out across England, Scotland and Wales.

The cap, which applies to people receiving jobseeker's allowance, child benefit, child tax credits and housing benefit, will see couples and single parents receive a maximum of £500 while single people will only receive £350.

The benefits cap, which is said to reflect the average household income, has already been rolled out in four London boroughs and will be fully implemented by 30 September.

Kate Bell, from the Child Poverty Action Group, said rising rent costs in London would mean the benefit cap hits families in the capital extra hard.

"We don't think it's fair to make children suffer for this cap.

"The real reason why people are going to be hit by the cap is because of the cost of their housing - most of the money these people are receiving in state support is going to housing benefit, which, of course, goes to the landlord, not to the family."